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Small-cap and mid-cap stocks don’t get as much attention from bankers, third-party analysts, and the media, which often leaves them less efficiently priced than large- and mega-caps. Hedge funds sometimes take advantage of this by dedicating their research teams to work on these lower-valuation stocks as well, and so often earn substantial alpha from their investments. Retail investors can use smaller-cap stocks that hedge funds reported owning as a list of suggestions which may result in outperformance; we’ve determined that the most popular small-cap stocks among hedge funds can earn about 120 basis points of alpha per month (learn more about our hedge fund small cap strategy). Investors can’t buy every single small-cap stock that any hedge fund likes and so it probably works best to review each pick in search of those with the best potential. Here are five stocks which billionaire Steve Cohen’s SAC Capital Advisors reported owning on its most recent 13F (see the full list of Cohen’s stock picks) with market capitalizations between $1 billion and $5 billion:

Branded and generic drug manufacturer Endo Health Solutions Inc (NASDAQ:ENDP) was SAC’s top pick in that range with the fund reporting a position of 4.6 million shares. The stock price is down 27% in the last year, but sell-side analysts are confident that the company will deliver high earnings in 2013. D.E. Shaw, a large hedge fund managed by David Shaw, also had a large position in Endo at the end of the third quarter (check out more stocks D.E. Shaw liked).

SAC also liked Superior Energy Services, Inc. (NYSE:SPN), with its position of 6.2 million shares at the end of September being much larger than three months earlier. Read more about Superior. Superior is an oilfield equipment and services company which most notably provides services related to offshore drilling. It currently trades at 10 times earnings, whether we consider trailing results or consensus for this year, and its five-year PEG ratio is 0.5 as analysts expect considerable earnings growth over the next several years. We think it has at least some upside potential and could be a good value stock.